European Banking Authority seeks feedback on a tougher MiCA penalty framework

The European Banking Authority has proposed a standardized penalty framework that would allow the European Union to impose multimillion euro fines on issuers of significant crypto tokens that breach the bloc’s digital asset rules.

The consultation paper, published on June 26, sets out a two-step methodology for calculating penalties under the Markets in Crypto Assets regulation. The EBA plans to first assess the seriousness of each infringement before adjusting the amount based on aggravating or mitigating circumstances.

Statutory penalties could reach up to 12.5% of annual turnover for issuers of significant asset-referenced tokens and 10% for issuers of significant e-money tokens. The consultation paper also allows fines of up to twice the profits earned from a violation, where applicable.

The proposal forms part of the enforcement framework for MiCA, which introduced a single regulatory regime for digital assets across the European Union. The regulation requires token issuers and crypto asset service providers to meet licensing, capital, consumer protection, and compliance requirements before operating across the bloc.

The EBA added that the proposed framework will establish a consistent process for calculating penalties across the European Union. As per the consultation paper, the methodology aims to ensure supervisory authorities apply financial sanctions in a uniform manner once the rules take effect.

July 1 licensing deadline approaches

The EBA released the consultation days before the July 1 MiCA licensing deadline, when crypto firms must obtain authorization from a national regulator to continue offering services or marketing stablecoins throughout the European Union.

Firms that fail to secure authorization could face enforcement action if they continue operating without approval or commit violations covered by the proposed penalty framework, including unauthorized public disclosures and organizational compliance failures.

The consultation period will remain open until Sept. 28, allowing industry participants to submit feedback before the EBA finalizes the methodology.

Binance has already begun restricting parts of its European business after failing to obtain MiCA authorization before the deadline. As previously reported, the exchange withdrew its MiCA application in Greece and has stated that it intends to seek approval through another European Union member state.

Exchange notices shared by users on social media confirmed that Binance will stop onboarding new European Union customers and limit selected services for existing users from July 1. The company also informed customers that digital assets will remain available for withdrawal after the restrictions take effect.

As uses moved out of Binance, Coinbase, OKX, and some other exchanges have responded by promoting their MiCA authorized operations to European customers. For instance, Coinbase launched a campaign across several European markets offering a 5% transfer bonus for eligible users who move assets before July 13, while OKX introduced welcome rewards and deposit matching of up to 8% for qualifying users in the European Economic Area.